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House Prices Continue To Rise As Mortgage Pressures Bite

During a somewhat more acute period of turmoil for the housing market, prices have continued to remain steady, as conveyancing brokers work with buyers to complete sales as soon as possible.

According to Rightmove’s House Price Index, the average house price in the UK has increased to another new record high of £371,158, although this increase is slightly lower than the five-year average.

As with the price increases that were seen in the first half of the year, the key motivator is buyer demand, which has continued to significantly outstrip supply, albeit at a lower level than was seen in 2021.

Overall demand is down 15 per cent, with demand amongst first-time buyers down 21 per cent in the two weeks following 23rd September, although both are higher than equivalent 2019 figures.

As of this report, however, most buyers are continuing to stick to their buying plans, with only 0.1 per cent more sales falling through in the two weeks between the Growth Plan 2022 being announced and being almost completely abandoned.

The effects of major fiscal events such as an increase in inflation, cost-of-living increases and mortgage rates reaching new heights take some time to reflect in overall price increases, as many of the buyers looking for houses now have locked in their mortgage rates up to six months previously.

By the time these effects will appear, they will coincide with seasonal price drops typically seen at the end of the year as people focus on the festive season, and exactly how the market will look by the start of 2023 is uncertain.

Whilst there are few certainties in such unique times until these final lower fixed-rate mortgage offers expire, the housing market is likely to remain robust until demand begins to fall closer to supply.

People with an agreement in principle and the ability to do so are continuing with purchases, and others are considering locking in their mortgage rate now in case the bank rate continues to increase further.